NE NEWS SERVICE
NEW DELHI, JULY 22
Financial bids for Air India are likely to be received from qualified interested bidders (QIBs) by September 15 this year, Minister of State for Civil Aviation V K Singh said on Thursday.
The Centre had invited Expression of Interests (EoIs) for Air India on January 27, 2020. The last date of submission – after multiple extensions due to COVID-19 pandemic – of EoIs was December 14, 2020.
“Multiple EoIs were received by Transaction Advisor. The EoIs were evaluated by the Transaction Advisor for selection of QIBs. Request for Proposal (RFP) along with draft Share Purchase Agreement (SPA) have been shared with QIBs by the Transaction Advisor on March 30, 2021, for submission of financial bids,” Singh stated.
“The financial bids are likely to be received by September 15, 2021,” he added in a written reply to a question in Lok Sabha.
The Centre has not revealed the names of QIBs as yet.
Of the airline’s total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286.5 crore, while the rest would be transferred to Air India Assets Holding Ltd (AIAHL), a special purpose vehicle, stated the EoI floated in January 2020.
Singh told Lok Sabha on Thursday: “Monetization proceeds of non-core assets of Air India are to be used to offset the debt of Air India transferred to AIAHL.”
Currently, Air India has been trying to sell a couple of its properties to reduce its debt.
The reserve prices of Air India’s properties were fixed by the airline’s Oversight Committee as the highest value received from three valuers, the minister stated.
“The Oversight Committee approved 10 per cent reduction in the reserved prices of 16 properties after previous attempts to auction the properties failed to attract bidders,” Singh noted.
The Centre had announced in October 2020 that the bidding for Air India would be done based on enterprise value instead of equity value.
Enterprise value of a company includes the equity value, debt as well as cash with the company. Equity value measures the value of a company’s shares.
The Centre had said in October 2020 that whatever enterprise value the bidder quotes, minimum 15 per cent of that has to be given in cash to the government and remaining value has to be taken as debt along with Air India.
After its unsuccessful attempt to sell Air India in 2018, the government in January last year restarted the divestment process and invited bids for selling 100 percent of its equity in the state-owned airline, including Air India’s 100 percent share holding in Air India Express Ltd and 50 percent in Air India SATS Airport Services Private Ltd.
In 2018, the government had proposed to off load 76 percent equity share capital of the national carrier as well as transfer the management control to private players.
However, the offer failed to attract any bidder when the deadline for initial bids closed on May 31, 2018.
COVID claimed lives of 56 Air India employees: Govt
As many as 56 Air India employees have died due to COVID-19 till July 14, Minister of State for Civil Aviation V K Singh said on Thursday.
“A total of 3,523 employees of Air India Limited have been affected by COVID-19. Out of this, 56 employees succumbed to this pandemic till July 14, 2021,” he stated in a written reply to a question in Lok Sabha.
The minister said the national carrier has taken various measures to safeguard the interests of COVID-affected employees and their families.
He stated that the carrier paid a compensation of Rs 10 lakh to the family of each permanent employee who died due to COVID-19.
When a fixed-term contractual employee died due to COVID-19, Air India paid his or her family a compensation of Rs 5 lakh, he noted.
Employees infected with COVID-19 were granted a paid quarantine leave of 17 days, he said.
“Reimbursement of vaccination charges are being provided to employees and their families if paid by them,” he said.
The minister said medical facilities were also being provided to COVID-positive employees.
